Alternative Work Schedules May Hike Up Overtime Costs
Payroll Practitioner's Monthly
September 09, 2009
Even in good times, employers look for cost-effective ways to enhance compensation packages in order to keep employees happy and productive.
In these challenging economic times, cost control becomes a matter of survival. Overtime costs are a major concern, particularly where there have been staff reductions. This article will discuss how scheduling may affect OT costs and three Fair Labor Standards Act (FLSA) opinion letters dealing with OT and scheduling issues.
Even before the current economic crisis and the fluctuations in energy costs, some employers adopted alternative work schedules. The programs are viewed as a way to control the costs attendant with absenteeism and to accommodate employee needs for time off during regular business hours.
Studies indicate that alternative work schedules can have a positive impact on employee satisfaction and productivity. Interest in a compressed workweek increases dramatically wheneverfuel prices increase, and 2008 was no exception.
The major types of alternative schedules include:
• A compressed workweek, which is typically 40 hours over four days.
• A staggered work schedule. For example: Employees are scheduled for either 7 a.m. to 3 p.m. or 1 0 a.m. to 6 p.m. (so all hours are covered) rather than having everyone scheduled from 9 a.m. to 5 p.m.
• A flexible work schedule in which the hours are flexible around core time. For example: The core time might be 10 a.m. to 2 p.m. with employees able to start as early as 6 a.m. and leave as late as 6 p.m.